Rachel Reeves pushes back on growing NATO demands as Labour refuses to commit to 3 percent defence spending in the UK
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Rachel Reeves pushes back on growing NATO demands as Labour refuses to commit to 3 percent defence spending in the UK

While international pressure is mounting—especially from Donald Trump and NATO allies—UK Chancellor Rachel Reeves is holding the line when it comes to ramping up defence spending.

Her message? Britain’s already doing its part, and any further boosts will have to wait.

The Spending Target for Now: 2.5%, Not More

In a round of interviews this morning, Reeves was clear that Labour’s defence spending commitment is sticking to 2.5% of GDP during this current Parliament.

That means any jump to the 3% or even 3.5% targets being floated by NATO leaders is, for now, just an “ambition” for after 2029.

“We’ve made the biggest sustained defence investment since the Cold War,” Reeves told Sky News.

“But our firm pledge for this Parliament is 2.5%. Anything beyond that, we’ll evaluate and cost properly in the future.”

Trump and NATO Turn Up the Heat

At the centre of the push for more spending are former US President Donald Trump and NATO’s new secretary general, Mark Rutte.

Together, they’re championing a new plan to have member countries pledge 3.5% of their GDP to defence by the early 2030s.

That’s not a small ask. For the UK, it could mean finding an extra £30 billion a year—no easy task in the current economic climate.

Other NATO countries face similar challenges, with nations like Germany and France needing to find upwards of $40–60 billion more annually to meet the proposed goal.

The Fiscal Reality: Can the UK Afford It?

Reeves hinted that these global expectations are colliding with economic reality at home.

She pointed to the financial pressures created by slowing economic growth and disruptions from Trump’s international trade policies.

These conditions, she suggested, are already putting major stress on the spending plans she announced in the Autumn.

Although the UK spent 2.33% of its GDP on defence last year and is aiming to reach 2.5% by April 2027, any significant boost beyond that would need to be carefully funded and planned for.

Reeves reiterated that further decisions would be made only after the next fiscal package is laid out.

Defence Spending Across the NATO Bloc

While the US spent 3.38% of its GDP on defence last year, the size of its economy means its contribution still outweighs the rest of NATO.

But many European countries are far below that mark—and will need to stretch their budgets significantly if they’re to match the new expectations.

To give some perspective:

  • Germany might have to come up with around $60 billion more per year.

  • France and Canada are each looking at roughly $44–$45 billion increases.

  • Italy and Spain could need to raise their defence budgets by $36–46 billion annually.

The UK’s Defence Review and Future Priorities

Last week’s UK Strategic Defence Review laid out an ambitious roadmap for the future of the British military, with a heavy emphasis on new technology.

From AI to drone warfare, the goal is to modernise the country’s capabilities—but those advancements come with a steep price tag.

Reeves didn’t deny the importance of staying ahead on tech and security but made it clear that everything must be properly costed.

She stressed that while Labour remains committed to national defence, the government won’t be rushed into matching spending targets that aren’t yet financially viable.